Correcting Misconceptions About Invisible Risk-Sharing

On April 6, the House of Representatives added an amendment from Rep. Gary Palmer (AL) and Rep. David Schweikert (AZ) to the American Health Care Act (AHCA) before their recess. The amendment was drawn, in part, from the proposal in our previous Health Affairs Blog post.

The proposal sparked a flood of media coverage, but many stories left much to be desired. Reporters and commentators repeatedly mischaracterized the program and some quoted individuals that clearly did not understand the mechanics of the program, which only deepened confusion.

Some thoughtful discussions emerged that should influence the provision in any final bill. Our goal is to correct a few misconceptions and suggest a few changes that would improve such a program based on a comprehensive independent analysis conducted by actuarial firm Milliman.